Council approves hotel site land deal

Johnston assures members no risk is posed to city

By JOHN PECK
Times Staff Writer
jpeck@htimes.com

The Huntsville City Council approved two major land purchases Thursday night: A downtown hotel site and a large parcel for the North Huntsville Industrial Park near the Toyota plant.

The council delayed action on a proposed 12 percent increase in water rates and an ordinance that would outlaw smoking in restaurants. Those issues will be considered at the July 25 council meeting.

The hotel site purchase, a 6.5-acre tract that houses the Holiday Inn Select (formerly the Huntsville Hilton), involves a complex three-way purchase arrangement among the hotel's current owners, Atlanta-based HJH Partnership; the city; and a newly formed nonprofit Huntsville downtown development group called Big Spring Partners, Inc.

Proponents say the buy will help the city ensure the property's continued use as a hotel to accommodate major conventions, concerts, athletic events and shows.

Here's how the deal will work:

Big Spring Partners plans to buy the Holiday Inn Select for $8.6 million. HJH Partners was looking for a buyer and Big Spring Partners, Inc., stepped in to broker a deal. The hotel owners agreed to finance $2.1 million of the building's cost for Big Spring Partners, Inc. Officials say the property and hotel building appraised for $13 million. The hotel group gets a tax write-off for selling below market value.

Big Spring Partners would then sell the land to the city for $6.5 million, which would come from the general fund. Huntsville will issue bonds this fall to replenish its coffers. The deal grants HJH Partners a 10-year deal to continue operating the hotel for an annual $260,000 lease fee paid to the city.

The arrangement drew criticism from at least one resident, who questioned why the city should get into the hotel business. Jackie Reed, a frequent council attendee, said the partnership is too entwined with developers and is not publicly accountable for its actions.

David Johnston, chairman of the BSP's board, acknowledged the partnership can keep its financial dealings secret. Councilman Mark Russell urged Johnston to press the partnership to submit some annual financial statements on its investment deals.

Johnston assured council members the hotel deal poses no risk to the city. He said the land buy is an opportunity for the city to nab a prime piece of real estate.

"We strongly recommend this to the city because you will control and own the property," he said. "It's at the front door to the city, the Von Braun Center and Big Spring International Park."

Judy Ryals, executive director of the Huntsville-Madison County Convention and Visitors Bureau, said having the 273-room Holiday Inn Select and the soon-to-be-opened 300-room Embassy Suites will help the city lure larger group events like conventions.

The other land deal concerned the 145-acre industrial park property on the northeast corner of Pulaski Pike and Bob Wade Lane/Martin Luther King Jr. Boulevard. The selling price was $715,214.

City Council President Richard Showers said last week that several industrial prospects have expressed interest in the site.

In other business:

- Council awarded a contract to Traveller Information Services of Huntsville to provide wireless Internet service for Big Spring International Park at no cost.

- The council got a briefing on a national clean cities award Huntsville recently won.

The city's Operation Green Team and Huntsville police formed a partnership with homeless people, inmate laborers and homeless advocacy groups to pick up litter around town.

The arrangement caught the attention of judges in a recent U.S. Conference of Mayors City Livability Awards competition among 151 cities.

Judges called Huntsville's homeless cleanup program "an innovative and cost-effective method" to rid unsightly litter.

"This program made people at the bottom feel they could be responsible citizens as well. It's a humane way of dealing with a problem that faces every city."

Huntsville placed in the top five in the large cities division (over 100,000 population) that included Seattle; Cleveland; Little Rock, Ark.; Miami; Salt Lake City; Providence, R.I.; and others.

- The council also scurried to ensure that its recently adopted fire code would outlaw fireworks in the city limits.

Had the council not adopted a new article in its fire code, the city's 20-plus year ban on fireworks would no longer have applied.

- The council also adopted an article granting arrest powers to police for fire code violations.

Police Chief Rex Reynolds said the most common application would be in enforcing crowd limits in packed buildings such as bars.

Published June, 24 2005, The Huntsville Times